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The Role of Cryptocurrencies in Funding Medical Research and Innovation
What Is Cryptocurrency?
Cryptocurrency is, in essence, a digital currency stored in a digital ledger, like the blockchain. Particularly used in financial transactions, cryptocurrency makes use of cryptography – a technology that helps secure and authenticate transactions. One of the major benefits of cryptocurrencies is their ability to make transactions quick and secure.
A prime example of this is Bitcoin, the first cryptocurrency created in 2009. Since then, the technology has grown by leaps and bounds to become what it is today. Since then, there have been over 20,000 cryptocurrencies created.
While it may seem like it only plays a huge role in the field of finance, the uses of this nascent technology are still being explored in a variety of industries. For instance, cryptocurrencies are now widely accepted in the e-commerce industry – thanks to widespread adoption being slowly underway. The gaming industry has also leveraged the power of crypto by accepting it as a form of payment.
But, there’s one industry in particular where crypto surprisingly makes a huge crossover: the healthcare industry. When it comes to research and innovation, the costs can get extremely steep – with funding being difficult to obtain. That’s where cryptocurrency comes into the picture.
What Is the Role of Cryptocurrencies in Funding Medical Research and Innovation?
Another advantage of cryptocurrency is the ability to make transactions without intermediaries, which is a game-changer for many industries. The healthcare industry, in particular, requires an excessive amount of funding to drive innovations. However, it’s also an industry that is plagued with bureaucratic processes – slowing down the whole process of research. Cryptocurrencies change that and here’s how:
Research Grant Distribution
The distribution of research grants is a long process filled with bureaucracy, which only lengthens the amount of time needed for a project to complete. Fortunately, cryptocurrencies eliminate the need for intermediaries – making it an ideal way to fund research projects.
This was the case in the project of Dr. Viktor Korolchuk from Newcastle University. His project focused on the activation of autophagy as a therapeutic approach in the fight against age-related diseases and other changes that come with aging. The project was funded by VitaDAO, a decentralized autonomous organization for decentralized drug development.
Thanks to the initial sale of 10% of VITA tokens, VitaDAO generated £3.8 million to fund research projects like that of Korolchuk. Holders of VITA tokens are allowed to vote on proposals, commensurate with the amount of VITA they hold. The funding process was done quickly, taking only 4 weeks. Normally, it would take longer. The power of cryptocurrencies lies in decentralization – there were no centralized agencies involved, hence the record time in which the funding was processed.
Initial Coin Offerings
In the world of cryptocurrencies, an ICO is a common term that you’ll hear quite frequently. Also known as initial coin offerings, ICOs are a great way for start-ups to pool funds. Companies issue these digital coins that can be bought with cryptocurrency and later on, even traded in exchanges. These coins are like shares, in the sense that they represent an ownership of a company. In comparison to other forms of capital-raising processes, ICOs have the edge as they lack intermediaries by bridging the companies directly to the investors.
While the concept of ICOs is truly groundbreaking, many malicious actors have prospered in the cryptocurrency space due to scams and rug-pulls – making many people wary of initial coin offerings. That’s why everyone needs to do their own research.
Another way to fund medical research is through crowdfunding, a type of funding that involves small contributions from a large number of people. Think of it as a GoFundMe campaign that accepts crypto, except that it’s done more efficiently because cryptocurrency is so quick and accessible. Anyone from across the globe can donate cryptocurrencies, depending on which ones an organization accepts. So if they accept Bitcoin, it helps to have a digital wallet or a private Bitcoin account, which can be accessed from anywhere.
These are what blockchain-based crowdfunding platforms accomplish. For example, an organization may raise funds to help fund the development of new drugs for cancer research. The possibilities are endless. But just like with ICOs, one must do their research carefully to avoid falling prey to scams.
Without a doubt, cryptocurrency is a huge disruptor to the medical research industry. From the holding of ICOs to expediting research grant distributions, it’s easy to see how it benefits the field and allows the industry to flourish. But it’s just as easy to see how many people can fall victim to common cryptocurrency scams. Nonetheless, cryptocurrencies have opened the floodgates of opportunities to the field of medical research – and more is still yet to come.